Monday, April 04, 2011

World Energy Crunch

Even if the world navigates today's crisis without an energy shock, a more intractable long-term crisis is brewing. Several countries are already turning their backs on the "nuclear renaissance" and shelving plans for fresh reactors. This implies a need for substitutes that will further strain fossil fuel supplies and bring forward the long-feared energy crunch.

It is too early to tell how much of this week's anti-nuclear rhetoric is posturing by politicians. Germany has imposed moratorium on renewal of 17 reactors. Switzerland and Taiwan are reviewing policy. China said on Wednesday that it was suspending approval of 25 reactors under construction. "We must fully grasp the urgency and importance of nuclear safety," said the state council.

US Energy Secretary Steven Chu also asked Congress for $36bn in loan guarantees for a new generation of small modular reactors. He has the backing of Capitol Hill for now but support could evaporate if Japan's containment vessels rupture. The world has 442 reactors, with 65 under construction. They generate 372 GW, covering 13.8pc of global electricity. The share is higher in the rich world: France 75pc, Belgium 52pc, Ukraine 47pc, Korea 35pc, Japan 29pc, the US 20pc, and the UK 18pc. In China it is just 2pc.

Much depends on whether shale gas fulfils its promise, or how soon we can achieve a quantum leap in solar technology, or exactly when the world hits "peak oil", and at what price. The UK industry taskforce on peak oil fears the crunch will hit at 95m bpd within a decade.
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